BOARD00125 ‎(2)‎

• Board Meeting Date: 1/24/2007
• Description: ISF Section - Injury with Mitigation - Case No. 1-04CW323, Application of EMJ Squaw Pass, LLC
• Board Meetings - Doc Type: Memo

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and recommendations by DOW personnel. Such recommendations will be made in consultation
withCWCB staff. DOW and CWCB staff may conclude that stocking is only needed or
desirable in the first year. In that case, EMJ will deposit the $3,000 into a designated account as
described below. This flexible approach for the first three years differs slightly from the attached
proposal and was negotiated by staff and EMJ in December 2006.

Following the third year, DOW and CWCB staff will reevaluate the two creeks to assess the
effectiveness of the fish stocking program. The evaluation will determine which of the following
alternatives EMJ should pursue: (I) continue the annual stocking; (2) temporarily suspend the
program; or (3) fund the construction of habitat improvement structures at key locations within
the two creeks. CWCB and DOW staff and representatives of EMJ will meet to discuss the
results of the evaluation and to develop a recommended course of action. Similar assessments
and meetings will be held every third year for the purpose of evaluating the effectiveness of the
mitigation plan and to establish a plan of action for the ensuing three-year period. Trout
Unlimited may provide input regarding the implementation of the mitigation plan at any point in
the process.

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Regardless of the recommended course of action, EMJ will continue to fund directly, or
contribute to a designated account, a sum of money equal to $3,000 annually. For example, if
DOW and CWCB decide to suspend the stocking program for two years to evaluate the health of
the fishery, EMJ will continue to fund the program during that period by depositing money into
an account. The money that is accrued in the account can be used in future years for stocking or
habitat improvements. The annual $3,000 contribution will be adjusted annually to account for
inflation, with the adjustment based upon a mutually agreeable index such as CPI or PPI. The
annual adjustments are a negotiated change from the attached plan's proposal to adjust the
payments for inflation every three years.

The stipulation between EMJ and CWCB would provide that EMJ may discontinue the annual
payment if (1) EMJ ceases operation of Echo Mountain and diversions are curtailed (i.e. if the
cause of the injury no longer exists; or (2) EMJ completes construction of its planned Warren
Gulch Reservoir and is able to fully augment its depletions at a location upstream of the two
CWCB ISF water rights.

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The attached proposal provides that EMJ will provide the annual $3,000 payments for a period of
25 years. After further negotiation, EMJ has agreed to change the proposal to provide that
following the 24th year of operation under the mitigation plan, CWCB, EMJ, and now will
reassess the impacts to Little Bear Creek and Soda Creek from the continued operation of Echo
Mountain Park. Using available historical data, the group will (1) quantify stream depletions, (2)
assess impacts, if any, on the aquatic resources of the subject creeks, and (3) take into account
improved stream conditions resulting from any channel improvements that occurred under the
plan. If the parties determine that EMJ's operations are injuring the Little Bear Creek or Soda
Creek ISF water rights, EMJ will continue the annual payments and mitigation activities under
the plan and the parties shall establish a schedule for further reassessments. If the parties
determine that the continued operation of Echo Mountain Park will not injure the subject ISF
water rights, EMJ will discontinue the annual mitigation payments, with the condition that if its